Tesla adapts production processes to meet China’s growing capacity

Tesla wants its piece of the pie. On Monday, the carmaker announced that it will start exporting “Model 3” sedans made in its Chinese “gigafactory” to Europe from the end of October. Elon Musk’s company hopes to gain market share on the Old Continent, where demand for electric cars is particularly strong.

The car will be shipped to more than 10 countries, including Germany, France and Switzerland, the automaker said in a statement posted on the Chinese social network WeChat on Monday. The Shanghai plant, the company’s first outside the U.S., had already begun delivering vehicles to China earlier this year.
200,000 cars a year

“As a global factory, we want to supply customers all over the world,” said Tesla’s Shanghai site manufacturing manager Song Gang in an interview with local reporters. Adding, “Exporting Tesla vehicles made in China is a key step in the group’s ambitions. “

Berlin factory

But sales of electric vehicles in Europe are growing at such a rate that the American firm has decided to turn to the Old Continent. According to Jato Dynamics, a London-based analyst firm specializing in the sector, the European market should overtake China in the near future. In order to gain a foothold in this market, Tesla has even launched a project for a factory and research and development center near Berlin, for what will be its first location in Europe.

But the California-based company is not turning its back on China for all that. Tesla plans to double its production capacity, sales network, charging stations and workforce in China.

Containment benefits Shanghai plant

In Q2 2020, nearly a third of the 90,891 electric cars delivered worldwide by the U.S. automaker came from this site. Because of the containment measures, the Shanghai factory, just after starting up, found itself propelled early on to be the main force in Tesla’s global sales.

From 150,000 to 550,000 units

Currently, the Shanghai plant has a production capacity of only 150,000 units. But the second construction stage, dedicated to the Model Y, is nearing completion, making it possible to expect a real boost in the volume of vehicles that will come out of it from the beginning of 2021.

Especially since some tasks should be outsourced abroad. The first examples of the Chinese-built SUV would be delivered during the first quarter.

The key to this scenario, which allows Tesla to be geographically close to several of its main suppliers, is a reduction in production costs that should ultimately benefit future buyers of the Model 3 and Model Y.

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